At some point in life, we all want to lose a little weight. Losing weight (and keeping it off!) is a process. You don’t just go to bed and then wake up slim and trim. Nope. You exercise regularly. You make some changes to your diet. And over time you start to see the results.
Investing is the same way. There is no secret get-rich-quick formula. You don’t go to bed one night and wake up wealthy the next morning. There may be people who promise these things, but I have yet to see one that lasts for the long-term.
Investing is a journey
In the process of becoming investors, we learn. We get some hands-on experience. We make mistakes—and learn from them. We get more and more experience. And in this process our knowledge, our confidence, and our abilities grow. Not to mention our bank accounts. In many ways, investing is a journey filled with highs and lows, joys and sorrows. But a journey always worth taking.
The journey is the reward
This is the key: The process we go through is even more important than the end goal. Who we become in the process, as a result of all the learning, mistakes, and experience, is where the real value lies.
As the old Chinese proverb goes, “The journey is the reward.”
The journey can be hard
1985 was the year from hell. Robert and I lost pretty much everything. At one point, we even lived in our car. It was undeniably the worst year of our lives. My self-esteem was crushed. The upsets were constant. My inner voice was saying persistently negative things like, “You can’t do that,” “You’re going to fail,” “You don’t know anything,” and, “You’re hopeless.”
I would honestly go to bed some nights thinking how much easier it would be if I just never woke up. It was the lowest point of my life.
The journey is worth it
Now, looking back many years later, I realize that Robert and I were both going through our own processes. There was no pretending: it was miserable. Yet, by going through that process, hitting bottom and then pulling ourselves back up, it was probably one of the best things that could have happened for both of us.
The result of that extremely difficult time made both Robert and me stronger and smarter individually and more committed and assured as a couple. It was invaluable. That was the reward at the end of the process.
Start your journey today
I guarantee that your own journey is waiting for you today. On it, you will make mistakes—sometimes huge ones! You will be challenged. You’ll have fearful moments. There will be times when your character is tested. But if you shy away from the challenge, you won’t grow. You won’t learn. And you won’t gain anything.
Today is the day to start your journey.
When I was younger, my rich dad said to me, “The rich get richer partly because they invest differently than others. They invest in things that are not offered to the poor and the middle class. Most important, however, they have a different educational background. If you have the right financial education, you will always have plenty of money.”
Rich dad often spoke of the three E’s of successful investors have. They are:
Most people understand reading, writing, and arithmetic. But those who are financially successful also have a different kind of education—financial education.
Financial education is the foundation for building wealth.
You know you are financially smarter when you can tell the difference between:
- Good debt and bad debt
- Good losses and bad losses
- Good expenses and bad expenses
- Tax payments versus tax incentives
- Corporations you work for versus corporations you own
- How to build a business, how to fix a business, and how to take a business public
- The advantages and disadvantages of stocks, bonds, mutual funds, business, real estate, and insurance products, as well as the different legal structures
A successful investor has a plan, is focused, and plays to win. This doesn’t mean that you won’t fail. Failure is part of the game. What separates the winners from the losers when it comes to investing is the ability to take the experiences, both successes and failures, and to learn from them to get better and better. That is what I mean by experience.
Most people do not learn from their successes and failures. Instead, they jump from one thing to another hoping one will stick. Hot tips don’t make you rich, experience does.
3. Excess cash
When most people hear they need excess cash to be a successful investor, they check out. I often hear them say things like, “I’m living from paycheck to paycheck,” or, “I’ll never have enough money to really invest well.”
The problem is that people hear excessive cash instead of excess cash.
When Kim was first starting out investing, she bought a small house in Portland, Oregon. She did not have a lot of extra money on hand. But she did have a great financial education, a plan, and was building her experience. She was able to save up the money needed for the down payment, and purchase the property. It cash flowed about $25 per month.
There is nothing wrong with starting small. It is through small investments that are successful that you can grow to larger and larger investments. Today, Kim owns thousands of apartment units across the US.
How’d she get there?
It started with financial education, continued with experience, and was kick started by wisely investing a little bit of excess cash. You can do the same, starting today.
When it comes to financial education, there is not a lot of good information out there for women. And what is out there borders on being downright demeaning and debilitating—how to balance a checkbook, how to buy car insurance, how to cut down on spending, or how to save pennies at the grocery store.
It’s downright ridiculous.
Do we need to know the basics? Absolutely. That’s all very important. But that alone is not enough. Once you understand the basics, then it’s time to take an active role toward attaining your financial goals.
And that starts with financial education. Something you have to be responsible for in your own life. The following are 13 ways to get the education you need:
1. Read books
There are hundreds of books about money and investing for those of you who are just getting started and for those who are seasoned investors.
2. Listen to audio books and podcasts
Your drive time is a great time to learn. Load up your smartphone with great audio books and subscribe to podcasts about finance, investing, management, personal development, and more.
3. Invest in educational seminars, workshops , and conferences
These may be free programs in your area or classes you pay to attend. Various community colleges, businesses, community clubs and organizations, and local investment groups often offer such programs. And some are geared for women.
4. Read financial newspapers and magazines
The Wall Street Journal, Investor’s Business Daily, and Barron’s are three newspapers heaped with investment information. Reading those daily will dramatically increase your financial knowledge. And to get a beat on what is happening in your area, subscribe to your local business journal newspaper.
5. Talk with real estate, stock, and business brokers
Ask them questions. They can give you a ton of information. Just be aware they also are there to sell you something. So keep your eyes open. I have found the most successful brokers are the ones very willing to share information and education with others.
6. Talk with other investors More »
It’s an alternative to paper currencies. It can be traded anywhere in the world. It has a limited supply. And it should be a secure haven if financial markets start to crash.
That is a fairly accurate description of gold. It is also an accurate description of bitcoin, the digital currency that is gaining in popularity all the time.
But here’s a puzzle. The price of gold has been falling for most of this year, and it would be a brave investor who called this as the bottom of the market. And yet the price of bitcoins has been soaring.
The goldbugs will tell you that the price of gold is being suppressed — it would be a lot higher if it was not being manipulated downwards. Others will argue that bitcoin is a faddish bubble, a nerd-ish equivalent of 17th century Dutch tulips. Its soaring price tells us nothing — except that people are as easily fooled as they always have been.
Bitcoin: Is the currency becoming more real?
Is bitcoin another flash in the pan? Or are the early investors onto something that will make them rich? WSJ’s Jason Bellini has the answer.
The actual answer is more interesting. Clearly there is a demand for alternative currencies, and bitcoin is in many ways a better product for that market. The price divergence is an illustration of how bitcoin is edging gold GCG4 -0.01% out of the “alternative money” market — and that is hardly bullish for the precious yellow metal.
For the few people who have not yet heard of it, bitcoin is a purely digital currency, minted in limited quantities by a pre-determined algorithm. No one knows who invented it, and no one controls it. Right now, there are 11 million bitcoins in circulation, and the algorithm will eventually create around 21 million of them. And that will be the lot — production will stop, and there will be that amount of digital money available, and no more.
At the start of this year, you could pick up one of those bitcoins for $13. Looking back, that was the steal of the year. The virtual currency jumped to a record of $947 Tuesday on the trading exchange Mt. Gox.
The point about bitcoin is that it is designed to be all the things that gold was back when the precious metal was a currency. It has a limited supply. It is not controlled by governments or central banks. It is not anonymous, as some people occasionally claim, but it is a lot more private than money held in a bank account. It is a store of value.
All things being equal, you would expect bitcoin price and gold prices to move in tandem. They should be driven by the same forces: a safe haven from turmoil in the markets; a hedge against inflation generated by central banks printing too much money, and a desire to diversify away from the dollar DXY +0.07% or the euro EURUSD -0.04% .
But quite the opposite has happened.
“Pretty soon the government has to start printing in mass. They’re only printing a trillion a year right now, but they will start printing more because, very simply, they can’t handle Social Security, Medicare…If they stiff those people, we’ll have anarchy.”
Unfortunately, Robert Kiyosaki’s view of the future of America is bleak. He believes that within the next five years, the entire system will collapse, ushering in a period of American chaos and poverty the likes of which have never been seen in the Land of the Free.
“I think the biggest thing I can warn people is this, from my indication, the people in the stock market – the guys with 401(k)’s, and IRA’s full of stocks, bonds, and mutual funds, they’re the next target; they’re going to get wiped out. The last target was 2007 and it was the homeowners. Now, they’re going to get the retirement plans.”